Wellard executive chairman John Klepec

AUSTRALIA’S Federal Government must take full legal responsibility for the direct and indirect consequences of the proposed ban on live sheep exports by sea, Western Australian-based livestock ship owner and charterer Wellard Ltd has submitted.

In its submission to the live sheep phaseout panel, Wellard outlined its strong opposition to the Federal Government’s decision to phase out the live export of sheep from Australia.

But if the Australian trade is going to be phased out, Wellard believes the industry must be given sufficient time to plan and implement an orderly transition, and 10-15 year phaseout.

Wellard last exported sheep in its own right in the financial year 2018, but has chartered vessels for sheep exporters in subsequent years.

Wellard said all supply chain participants must be compensated by the government individually and fully for the diminution in their business value, and for any and all future opportunity cost losses that can be modelled.

The proposed ban is not based on science or economics, but instead, on politics. In such a case, there must be fulsome and individually tailored compensation for the compulsory obligation to close some or all of a participant’s business. Compensation must not be delayed or denied, the exporter submitted.

Wellard said compensation must take into account the overall effect of the ban on a business, not just the immediate forfeiture of a revenue stream. Whilst the ban may only effect one part of a business, the stresses and impacts on the overall viability and longevity of the whole enterprise must be compensated for, the exporter said.

Wellard believes the phaseout decision has been made out of political expediency, and is not based on sound economic analysis, or a thorough examination of the science around obtainable animal welfare outcomes.

It said its position is based around three key principles:

1. a) The government was warned as early as 2009 that Australia’s shipping standards were insufficient to protect animal welfare, yet it refused to act until after the M/V Awassi Express incident. It is inequitable and unfair that the nation’s sheep farmers and the rural communities who rely on them will bear the burden of the government’s inaction.
2. b) The government, either through convenience or malfeasance, is using incorrect figures to downplay live sheep export volumes, and therefore the economic importance of the trade to the Australian sheep industry, and in particular, to Western Australia.
3. c) The live sheep export trade is meeting contemporary expectations of the Australian public so should not be held liable for historic issues.

If the Australian trade is going to be phased out, Wellard said the industry must be given sufficient time to plan and implement an orderly transition, and 10-15 year phase out.

Referring to the impact of the role of supply on recent Export Supply Assurance System leakages in the Oman market, Rural Exports and Trading (WA) director Murray Frangs told the ABC that the company’s business experience “recognises the necessity of supplying regular consignments in manageable numbers that are balanced with the capacity and capability of the destination supply chains and markets.”

Wellard executive chairman John Klepec said history has shown that exporters have been able to run successful Eid festival programs and meet the requirements of regulators and the expectations of the Australian public.

“The hallmarks of those successes are closed loop supply chains, the deployment of resources to assist the importer and a very strong relationship with an importer who possesses a commitment to uphold ESCAS, all of which do come with a financial cost.

“Largely it comes down to the commitment, resources and relationships from the exporter,” he said.

“One point we have previously raised, is that the penalties applied to large and consistent breaches have not proved a deterrent.”

Mr Klepec said temporary facilities that meet certain animal welfare standards and ESCAS requirements, can be established to handle increased numbers.

“However, if the supply of sheep vastly exceeds the capacity, then it does create ESCAS pressures.”

In its submission to the live sheep phaseout panel, Wellard recommended that the Federal Government reconsider its proposed ban on live sheep exports; partner with all industry participants to understand and enhance the considerable opportunities for positioning Australian live sheep as the premier product available in foreign markets and examine the relatively simple opportunities to upgrade AMSA shipping regulations to further improve animal welfare outcomes;

Wellard also recommended the government ban non-compliant ships and sub-standard export license holders from the Australian market and advocate internationally for the implementation of highly protective animal welfare standards for the live shipping of all livestock by sea by all international regulators.

The government should also invest in the substantial political, foreign trade and diplomatic opportunities present in supporting an enhanced live sheep trade to the principal Middle Eastern markets, and develop new markets.

Wellard said the government should also co-invest with producers and exporters, including livestock ship owners, in underwriting best quality assets to ensure that Australian sheep are provided to international markets as best quality, ethically treated stock. The government could also examine the substantial opportunities in regional Australia for indigenous businesses to participate in all aspects of the live sheep export trade, the exporter submitted.